An increase in the number of patients treated and discharged (up 4.6 percent), plus an increase in the amount of revenue per patient discharged (up 3.0 percent), led to the gains, the Birmingham-based health care management company explained.

Income from continuing operations grew more than 12 percent, from $205.8 million in 2011 to $231.4 million in 2012.

The company expects revenues to increase again in 2013, with growth projected between 4.9 percent and 6.2 percent -- lower than 2012's rate, but with room left for upside, explains CEO Jay Grinney. "The smart companies will [project revenue growth] in a conservative manner," he said in a call with AL.com.

But while revenue growth is expected to remain relatively stable, the effects of sequestration on health care providers could slow HealthSouth's ability to grow earnings.

Without sequestration, HealthSouth expects that its adjusted EBITDA (an earnings measure) would increase by between $39.6 million and $49.6 million in 2013. But scheduled cuts to federal spending could end up reducing that gain by 50 percent or more -- overall, the company expects a $25 million negative impact on the same measure.

And at this point, the cuts -- particularly as they pertain to health care providers -- seem likely. "We expect that it will happen," Grinney said of sequestration.

But some expenses will go down in 2013. Money spent on professional fees fell from $21 million in 2011 to $16.1 million in 2012, and should go down to about $5 million this year, Grinney said, as deliberations with Ernst & Young approach their end.

Supply costs were also down in 2012, if only slightly (roughly $400,000, or 0.4 percent), despite a 6.1 percent increase in total operating expenses.

Concurrent with the company's Monday earnings release, HealthSouth also announced that it had authorized an expansion of its share repurchase program, from $125 million to $350 million.

HealthSouth is the nation's largest owner and operator of inpatient rehabilitation hospitals, with operations in 27 states, as well as in Puerto Rico.